Thursday, March 8, 2012

The developer of the Vue condominium highrise in uptown says the tower will remain a condo building.

A real estate firm published a report this week saying two insurance companies that control some of the debt on the Vue luxury condominium tower in uptown are trying to sell the project’s troubled loan to investors interested in changing the condos into apartments.

The insurance companies, based in Germany and Japan, control $130 million of the tower’s $195 million balance on its construction loan, Real Estate Alert reported Wednesday.

But developer Dan McLean with MCL Cos. of Chicago said there are no changes planned and shared the following statement with the Observer:

The VUE Charlotte is remaining a condominium building. Nothing has changed. Several of its European mezzanine lenders are attempting to sell their junior mortgage to a third party investor. The VUE Charlotte has nothing to do with this process and will continue to sell condominiums as it always has. The VUE Charlotte has not been in default on its mortgage.

Real Estate Alert reported that MCL defaulted on the loan in February 2011, which the developer says is not true. It also reported that a buyer would also have to pay off the loan’s remaining $58 million portion, held by Goldman Sachs.

Real Estate Alert has reported that McLean personally guaranteed the Vue’s construction loan when it was restructured in late 2009. The loan maturity was extended to late 2012, "but the cashflow woes worsened, as new sales dried up and some early buyers successfully sued to be let out of their purchase agreements," the report says.

The $275 million Vue at Fifth and Pine streets overcame fierce challenges when it became the only new luxury condo tower to survive the recession.

As sales agents struggled to sell condo units in the weak housing market, McLean has repeatedly said he would never turn the tower into rental units. In an October 2009 interview, McLean told the Observer there was “no way” the Vue condo tower would convert to apartments, as other condo projects had done.

The 50-story Vue offers studios, one-bedroom units, two-bedroom units and penthouses. It features an Olympic-size pool, tennis court, fitness center, dog-walking area and a wine cellar.

Between the time the luxury condo tower was announced in 2005 and when it was finished in fall 2010, the economy had blossomed and then burst, uptown condo projects have sprouted and then fallen out of favor, and buyers have gone scarce - either unable or unwilling to commit money toward a new home purchase.

McLean refused to lower the sales price and said he was betting on buyers looking for second homes.

The Vue has said roughly 60 percent of the 409-unit building was presold. But relatively few of those units have closed. The Vue’s condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit.

Granted the apartments are too expensive. But the area doesn't help. I'm sure buyers of that caliber want an area with everything. With uptown Charlotte lacking a few amenities, particularly shopping, I think it's a hard sell.

Spot on anonymous at 9:21am- Why would anyone want to pay that type of money for an uptown area, that does not offer a whole lot. -Lack of shopping/1grocery store/no outdoor cafes or coffee shops/No breathtaking views. - Shall I go on.

charlotte will never have a thriving uptown residence program because there is no retail uptown. go to chicago, philli, ny anywhere and uptown is developed around a thriving retail section which includes cafe's and meusems. charlotte has no reason to be uptown browsing on the weekends.

"charlotte will never have a thriving uptown residence program because there is no retail uptown. go to chicago, philli, ny anywhere and uptown is developed around a thriving retail section which includes cafe's and meusems. charlotte has no reason to be uptown browsing on the weekends."

It's very much a chicken-egg scenario. No retail exists because of low uptown population. Low uptown population (partially) exists because there are few retail amenities.

I like Uptown, and live there, but it isn't really a fully livable area. You have to leave to go shopping and do other essential tasks sometimes.

Metropolitan at Midtown is definitely a step in the right direction, but it is not actually in Uptown.

Southpark is more developed a self contained community in my opinion. Many residents near the heart of the Southpark region can walk to grocery stores, book stores, dozens of restaurants, and excellent shopping options.

Uptown will improve, but I definitely agree that it is not worth paying Vue prices to live there.

I have very nice condo there and could not be happier. What makes me different is the fact that I knew what I could afford and am now reaping the benefits. It pays to do your homework people and stop complaining about your lot in life!

First of all...what benefits....Oh please do share about your 'benefits'. and secondly no one is complaining. The writing is on the wall with uptown Charlotte. Uptown Charlotte defintely needs a complete overhaul, if the Vue continues to command those outlandish prices.

The reason there will NEVER be any street-level retail in Uptown is due solely to the Overstreet Mall and all of its connections. You can walk from the Hearst Tower and Epicentre to the Ratcliffe without ever seeing the street. And there will never be the will to tear it down, ergo, there will never be street-level retail. I believe they passed an ordinance at some point to prohibit the acres and acres of bank lobbies that front Tryon, but of course the banks complained, and it was either repealed or never enforced.

"It's very much a chicken-egg scenario. No retail exists because of low uptown population. Low uptown population (partially) exists because there are few retail amenities."

This is just a cliche excuse. Build both at the same time, as already suggested by another comment. With rental property at a premium there's definitely a market, especially for young bankers.

As for the 12:34pm comment. Those routes are used mostly during business hours anyway for lunch breaks, not shopping. Also, if it wasn't for the banking industry in Charlotte i'm pretty sure there wouldn't even be an "uptown". I'm okay with a few bank lobbies...

"This is just a cliche excuse. Build both at the same time, as already suggested by another comment. With rental property at a premium there's definitely a market, especially for young bankers."

You can build it all you want, but that doesn't mean anyone will actually occupy it.

There is unused retail space at epicenter. There is unused retail space in the bottom of Vue. There is unused retail space in the bottom of Catalyst. There is unused retail space in Founders Hall. There is unused retail space in the Duke Energy Center. There is unused retail space in several other places in Uptown...

The critical mass does not exist to support retail in Uptown. There needs to be enough foot traffic to support retail in Uptown because Northlake and Southpark are short drives away and will attract all the suburban shoppers over a gridded city street that requires more walking and less convenient parking.

How do you get more people to live uptown? Well, you can built more residential units of course, but until more retail exists in Uptown, there will be a lot of people that don't really see the value in living in Uptown.

I like living Uptown, but I can understand why everyone doesn't want to live there.

I just returned from Minneapolis for a business trip (Wells Fargo). Major difference between downtown Minneapolis and uptown Charlotte - shopping options. Downtown MPLS. has stores like Neiman Marcus, Macy's, Target, Sak's, Banana Republic, etc... I saw two downtown grocery stores under construction, including a Whole Foods. What I don't understand is how can a downtown area like MPLS remain so active when both the Mall of America and downtown St. Paul, which also has retail, are only 10 miles away and uptown Charlotte can't get anything going.

The city of Charlotte has a chance to improve the life and energy of the Uptown. Build the ballpark! The investment of $10M in the ballpark is relatively small to bring in a business that brings up to 10,000 people to the area 72 days during the summer. Triple A ball is one step away from the Majors! Check out the parks in Louisville, Indy, Lehigh Valley, and more. The impact of these parks is enormous on the community in so many ways.

Cosign with the comment at 1:40pm. - I am a native of Charlotte, born and bred, but make my home in Minneapolis. Im sorry, it's my hometown but Charlotte's downtown area is just plain sorry. Why would anyone in their right mind pay those prices for the Vue. No downtown shopping/No outdoor cafes/no 24hr coffeehouses/no happening entertainment venues..Just not enough going on to make me want to jump and say, "Lets live in uptown Charlotte"...

I think that starting with general, highly desirable stores like Target or grocery stores bring in a desire to live by them. Once those are in place, more stores like specialized clothing and other goods add additional value. The issue is that uptown is missing those basic, everyday convenience stores that places like Minneapolis have.

Dear anon, 10:42, glad you enjoy the Vue and have enough capital to survive the large loss of value you will realize when you sell your unit in a couple years. Wait until the tenants quit paying the monthly fees, then the slide will be more profound.It would make for mighty fancy Section 8 housing though.

Dear anon 2:29 Anyone who bought a house or condo in 2006 has lost a lot of money. I doubt the VUE has lost more value than Avenue or properties in Balantine. It isn't a VUE issue, it is a housing issue. There are a lot of people who live uptown. I am one of them. I love it there. I do have to do some shopping elsewhere, but if you live in the burbs you have to drive to EVERYTHING. I have to drive to do some shopping--and I hate shopping. I can walk to dinner, the movies, theatre and yes a Harris Teeter. Uptown is alive with events, arts and great people. It is not for everyone, but everyone I know that lives there doesn't have any desire to trade their lifestyle for the burbs.

And btw, the tenets are not paying any monthly fees now, the developer is. The building is way to nice to stay an apartment building. If it does go apartments, it will certainly convert to condos, like 5th and Popler did, when times are better. I am not sure why you are so hostile to people who have made a different choice than you would.

Uptown Charlotte needs to lower the commercial lease rates to attract the businesses. If they did this, business could afford to get in the door, attract clientele, build the population, then pay a higher rate later. Charlotte needs to get it together quickly and offer some incentives. The unemployment rate is high in the city, the DNC is coming, layoffs are coming, and the World will be watching in a few short months. The City has one good shot to show the World a thriving business infrastructure, incentive's for new business in Uptown should be one our highest priorities.

It's funny that some of you try to compare Charlotte to Minneapolis, Philly, Chicago, NYC for amenities in downtown, when all you have to do is look at smaller cities in the region. Asheville, Winston and even Salisbury have more amenities than downtown Charlotte. If you want to buy say, guitar strings, you can't do that in Charlotte but you can in Winston and Asheville. Is there a beer store in Uptown, there are 2 in Asheville and one in Winston and Charleston. Yes, those just 2 examples, but Uptown just lacks amenities and storefronts. E

Sorry Charlotte, but your downtown is just one dimensional. Banks, bars, restaurants and a few museums. You can find the same things in Asheville, WS, Gso and Greenville to name a few.

I like cities, they can be interesting, but Charlotte is the worst. I now people who gave uptown living a chance, but they go tired of drunk 20 something bankers coming home beligerent because they didn't score.

Charlotte has made amazing progress in the past 15 years. It takes time people. We can really blame SouthPark mall for the death of uptown. Im sure MSP and other mentioned cities didn't always have the shopping options they do know. Also, what about the thousands of hotel rooms uptown. Visitors from out of town coupled with residents in uptown could support additional retail. People LOVE to hate on uptown Charlotte but recently had an out of town friend in town and they thought it was lovely. They are from Philadelphia. Of course they commented on how clean Uptown is. Either way Uptown will continue to get better.

Ely Portillo

Ely Portillo

About this blog

Ely Portillo covers economic development for the Observer, writing about who's building what in a city that seems to be sprouting new apartment and office towers on every corner. He also writes about Charlotte's airport, a major hub that's also undergoing a huge growth spurt. A transplant from Maryland, he's been reporting on his adopted hometown for more than five years. If you have a tip or story idea to share, you can contact him by email or give him a call at 704-358-5041. For the latest news, follow him on Twitter @ESPortillo.